Automotive business players are optimistic about reaching their sales target of 1.05 million cars by year-end after reaching half of the target by June, thanks to better economic conditions that have led to improved purchasing power.

Halfway through the year, from January to June, 531,929 units were sold to dealers. The figure is 50.6 percent of the full-year target and a 1.22 percent increase from the 525,491 units they sold in the corresponding period in 2015, Association of Indonesian Automotive Manufacturers (Gaikindo) data shows.

Gaikindo was optimistic about seeing the target reached on the back of better public purchasing power caused by lower bank lending rates and boosted confidence over macroeconomic conditions brought about by the government’s tax amnesty policy that is expected to bring billions of dollars into the country.

“I believe we can beat the target. There are many disturbances from outside, but local interest rates are going down and there’s also a tax amnesty and various positive sentiments going on,” Gaikindo co-chairman Rizwan Alamsjah told reporters recently.

Bank Indonesia (BI) has cut key interest rates four times by 100 basis points to 6.5 percent. The benchmark rate will change to the seven-day reverse repo rate, currently at 5.25 percent, starting Aug. 19. The moves are widely expected to be transmitted into lower lending rates.

Meanwhile, the one-month-old Tax Amnesty Law has also inspired hope that the Rp 1 quadrillion funds expected to be repatriated under the program would create new businesses that will employ more workers, hence boosting public spending power.

Besides macroeconomic factors, better sales are projected to come from the launch of new models. Dozens of new models will be announced at the upcoming GIIAS grand auto show from Aug. 11 to 21 at the Indonesia Convention Exhibition (ICE) in BSD City in South Tangerang, Banten.

Indonesia’s largest car maker, Astra International, which controls more than half of the automotive industry market, saw its car sales rise 4 percent to 273,000 units in the first half of this year from the corresponding period a year ago after launching six new models and five revamped models during the January to June period.

“We expect business performance from the automotive and consumer segments to remain solid,” Astra president director Prijono Sugiarto said in a recent press statement.

Astra, a publicly listed diversified conglomerate, saw sales of Japanese-origin Toyota brand cars rising 12 percent to 187,438 units last semester from 167,663 units in the same period last year, thanks to at least three new models launched: a new series of Fortuner, an Innova and a brand new model of Sienta.

Local Toyota producer Toyota Astra Motor’s vice president director Henry Tanoto predicted 15 to 20 percent sales growth in the second half, as reported by tempo.co.

Other major brands that contribute to Astra’s car sales include Daihatsu and Isuzu, which saw sales reaching 89,510 units and 8,064 units, respectively, during the first six months of the year.

Another big local automotive brand, Honda, manufactured by Honda Prospect Motor, enjoyed sales of 109,662 units, already 60.9 percent of its full year target of 180,000 units, thanks to the launch of new series of Brio and Accord.

---------------

To receive comprehensive and earlier access to The Jakarta Post print edition, please subscribe to our epaper through iOS' iTunes, Android's Google Play, Blackberry World or Microsoft's Windows Store. Subscription includes free daily editions of The Nation, The Star Malaysia, the Philippine Daily Inquirer and Asia News.

For print subscription, please contact our call center at (+6221) 5360014 or subscription@thejakartapost.com

Popular

Volcano erupts in North Sulawesi, hundreds evacuated

Dubai roads, airport reel from floods after record rains

Ramadan boosts consumer confidence, retail sales